Recent data from Benham and Reeves has unveiled a significant surge in rents across Great Britain, with London landlords emerging as the frontrunners in reaping the rewards. According to an analysis by Benham and Reeves of the latest figures from the Office for National Statistics (ONS), London has witnessed double-digit increases in rents, outstripping all other regions.
The average cost of renting a property across Britain surged by 9.1% in the year leading up to March 2024, reaching £1,246 per month. However, London overshadowed this national average with an impressive 11.2% year-on-year increase in rents.
Scotland stood as the sole contender alongside London to witness double-digit rental growth, recording a substantial 10.5% surge in rents over the same period.
Delving deeper into the data at a local authority level, Benham and Reeves identified Brent as the epicentre of rental growth in the UK. The London borough experienced a staggering 27% spike in rental costs within a single year, propelling rents to £1,940 per month from £1,527 in 2023. Notably, London claimed two additional spots in the top 10 rental hotspots in Britain, with Greenwich and Islington witnessing increases of 15.8% and 14.2% respectively.
Beyond the capital, Folkestone and Hythe emerged as the second-largest gainers in rental values across Britain, with a remarkable 22.5% annual increase. Birmingham secured the seventh position with a 14% rise, while Oldham and Ipswich clinched the ninth and tenth spots respectively, with increases of 13.9% and 13.3%.
However, Scottish regions also made a notable presence in the top 10, with Lothian, West Dunbartonshire, and Argyll and Bute securing spots with increases ranging from 14.0% to 15.7%.
In Scotland, the government imposed a ban on rent hikes between September 2022 and April 2023, followed by a cap of 3% on rent increases in most cases until March 2024 when the cap expired. The potential reintroduction of rent controls remains uncertain, with some commentators suggesting that previous policies might have inadvertently fuelled rent increases by deterring landlords and limiting housing supply.
Marc von Grundherr, director of Benham and Reeves, commented on the robust demand for rental properties, particularly in London boroughs like Brent, Greenwich, and Islington. He noted that despite challenges such as rising mortgage rates and energy costs, landlords are capitalizing on the high demand, making renting out properties increasingly profitable.
With rental growth not only confined to London but also evident across every region, landlords are navigating a landscape where tenant demand continues to drive profitability, even as some opt to exit the sector.